Rfd OH-3-96 Federated Pipe Lines
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CANADA National Energy Board Reasons for Decision Federated Pipe Lines (Northern) Ltd. OH-3-96 April 1997 Facilities National Energy Board Reasons for Decision In the Matter of Federated Pipe Lines (Northern) Ltd. Application dated 12 November 1996 for the Taylor to Belloy Pipeline Project OH-3-96 April 1997 © Her Majesty the Queen in Right of Canada 1997 as © Sa Majesté la Reine du Chef du Canada 1997 represented by the National Energy Board représenté par l’Office national de l'énergie Cat. No. NE22-1/1997-5E No de cat. NE-22/1997-5F ISBN 0-662-25661-1 ISBN 0-662-82001-0 This report is published separately in both official Ce rapport est publié séparément dans les deux languages. langues officielles. Copies are available on request from: Exemplaires disponibles sur demande auprès du: National Energy Board Office national de l'énergie 311 Sixth Avenue S.W. 311, sixième avenue s.-o. Calgary, Alberta Calgary (Alberta) T2P 3H2 T2P 3H2 (403) 292-4800 (403) 292-4800 For pick-up at the NEB office: En personne, au bureau de l'Office: Library Bibliothèque Ground Floor Rez-de-chaussée Printed in Canada Imprimé au Canada Table of Contents List of Tables .............................................................ii List of Figures ............................................................ii List of Appendices .........................................................ii Abbreviations ............................................................ iii Recital and Appearances ................................................... iv 1. Introduction .......................................................... 1 1.1 Background ....................................................... 1 1.2 Environmental Screening .............................................. 2 2. Supply .............................................................. 4 2.1 Overall Supply ..................................................... 4 2.2 Project Supply ..................................................... 4 3. Transportation and Markets .............................................. 6 3.1 Crude Oil and Natural Gas Liquids ....................................... 6 3.2 Transportation Agreements and Committed Volumes ........................... 7 4. Traffic, Tolls and Tariffs ............................................... 10 4.1 Market-based Toll Methodology ........................................ 10 4.2 Financial Matters .................................................. 11 4.3 Form of Regulation ................................................. 11 4.4 Common Carrier Obligations .......................................... 12 5. Facilities ............................................................ 15 5.1 Pipeline ......................................................... 15 5.2 Pump Stations ..................................................... 15 5.3 Truck Terminal .................................................... 15 6. Public Consultation, Environment, Socio-Economics, Land and Right-of-Way ........ 18 6.1 Public Consultation, Environmental and Socio-Economic Matters ................. 18 6.2 Land and Right-of-Way Matters ........................................ 18 6.2.1 Routing .................................................... 18 6.2.1.1 Route Selection Criteria ................................... 18 6.2.1.2 Preferred Route ......................................... 19 6.2.2 Land Requirements ............................................ 20 6.2.3 Access Development ........................................... 20 7. Disposition .......................................................... 21 (i) List of Tables Table 2-1: Available Liquid Volumes ........................................... 5 Table 3-1: Committed Volumes (m3/d).......................................... 8 List of Figures Figure 1-1 Federated Northern - Location Map .................................... 3 Figure 5-1 Federated Northern - Proposed Facilities and Alternative Pipeline Routes ......... 17 List of Appendices I. Proposed Certificate Conditions ............................................ 22 (ii) Abbreviations Act National Energy Board Act AEUB Alberta Energy and Utilities Board AIA Archaeological Impact Assessment B.C. British Columbia CEAA Canadian Environmental Assessment Act Certificate Certificate of Public Convenience and Necessity Dow Dow Chemical Canada Inc. Express Express Pipeline Ltd. Federated Northern Federated Pipe Lines (Northern) Ltd. Federated Western Federated Pipe Lines (Western) Ltd. FPL Federated Pipe Lines Ltd. GLJ Gilbert Lausten Jung Associates Ltd. Home Home Oil Company Limited HRIA Historical Resources Impact Assessment Imperial Imperial Oil Limited Kinetic Kinetic Resources (LPG) Morrison Morrison Petroleums Ltd. NCL Novagas Clearinghouse Ltd. NCPL Novagas Clearinghouse Pipelines Ltd. NGL natural gas liquid(s) Peace Peace Pipe Line Ltd. Pouce Coupé Pouce Coupé Pipe Line Ltd. PTA Pipeline Transportation Agreement Solex Solex Gas Liquids Ltd. Trans Mountain Trans Mountain Pipe Line Company Ltd. WEI Westcoast Energy Inc. (iii) Recital and Appearances IN THE MATTER OF the National Energy Board Act ("the Act") and the regulations made thereunder; and IN THE MATTER OF an application dated 12 November 1996 by Federated Pipe Lines (Northern) Ltd. for a Certificate of Public Convenience and Necessity under Part III of the Act for proposed facilities and Orders pursuant to Part IV of the Act for tolls which would be applicable to the proposed pipeline; and IN THE MATTER OF Hearing Order OH-3-96; HEARD in Calgary, Alberta on 24, 25, 26 and 27 February 1997. BEFORE: A. Côté-Verhaaf Presiding Member K.W. Vollman Member J.A. Snider Member APPEARANCES: R.M. Perrin Federated Pipe Lines ( Northern ) Ltd. H.R. Huber A.Z. Menzies Alberta Natural Gas Company Ltd. S.H. Castonguay Amoco Canada Resources Ltd. S. Hutchinson Chevron Canada Resources and Chevron Canada Limited K.F. Miller Dow Chemical Canada Inc. D.G. Davies Imperial Oil Limited; Kinetic Resources ( LPG ); Solex Gas Liquids Ltd. G.M. Nettleton Interprovincial Pipe Line Inc. K.C. Carr Morrison Petroleums Ltd. K.L. Mayer Northwest Pacific Energy Marketing Inc. A.S. Hollingworth Novagas Clearinghouse Pipelines Ltd. D. Wood F.R. Foran, Q.C. Peace Pipe Line Ltd. and Pouce Coupé Pipe Line Ltd. S. Lee M.W.P. Boyle Trans Mountain Pipe Line Company Ltd. C.J.C. Page Alberta Department of Energy C. McKinnon Board Counsel (iv) Chapter 1 Introduction 1.1 Background On 12 November 1996 Federated Pipe Lines (Northern) Ltd. ("Federated Northern", "the Applicant" or "the Company") applied, pursuant to section 52 of the National Energy Board Act ("the Act"), for a Certificate of Public Convenience and Necessity ("Certificate") to construct an oil pipeline from Taylor, British Columbia ("B.C.") to Belloy, Alberta. At Taylor the applied-for pipeline would connect to oil and natural gas liquid ("NGL") facilities of Federated Pipe Lines (Western) Ltd. ("Federated Western"), Morrison Petroleums Ltd. ("Morrison") and Solex Gas Liquids Ltd. ("Solex"). At Belloy, the applied-for pipeline will connect to a pipeline proposed by Federated Pipe Lines Ltd. ("FPL") and recently approved by the Alberta Energy and Utilities Board ("AEUB"). The applied-for pipeline is illustrated in Figure 1-1. The applied-for facilities consist of 171.7 kilometres of 273.1 mm outside diameter pipeline, interconnecting pipelines and pumping and metering facilities at Taylor, an intermediate pumping station near Bonanza, Alberta, a truck delivery terminal near Spirit River, Alberta and metering facilities at the Belloy junction. The facilities are designed to transport, in batch mode, up to 8250 m3/day of crude oil and NGL from receipt points at Taylor and Spirit River to the Belloy junction. From this point, the oil and NGL will be transported on the proposed FPL pipeline to existing facilities of FPL near Judy Creek, Alberta which will provide transportation to NGL storage, fractionation and marketing facilities at Fort Saskatchewan, Alberta and to crude oil storage and marketing facilities at Edmonton, Alberta. The Board issued Hearing Order and Directions on Procedure OH-3-96 on 17 December 1996 which set Federated Northern’s application down for an oral public hearing. The hearing was held in Calgary on February 24 -27, 1997. Figure 1-1 illustrates two other proposed pipeline projects competing for supply in the Taylor area and proposing pipeline transportation to the Edmonton and Fort Saskatchewan areas. The proposal of Novagas Clearinghouse Ltd. ("NCL") and Novagas Clearinghouse Pipelines Ltd. ("NCPL") would source NGL at Taylor and various points in Alberta and would transport these liquids to NCL’s storage and proposed fractionation facility near Redwater, Alberta. The intra-Alberta portion of the pipeline project were recently approved by the AEUB. The other pipeline proposal is a joint project of Peace Pipe Line Ltd. ("Peace"), Pouce Coupé Pipe Line Ltd. ("Pouce Coupé") and Morrison. Peace operates a crude oil and NGL transmission system which provides transportation from points in northwestern Alberta to Edmonton and Fort Saskatchewan. Peace recently obtained AEUB approval to loop a portion of its system which will provide additional crude oil and NGL capacity. Pouce Coupé, a subsidiary of Peace, owns an interprovincial oil line running from Dawson Creek, B.C. to a point of connection with the Peace system near Gordondale, Alberta. Morrison proposes to build a pipeline from Taylor to connect with the Pouce Coupé pipeline at Dawson Creek. OH-3-96 1 The proponents of these